Transactions & News

The Bottom Line: NewSpring Launches New Investment Strategy with Investment in Blo Blow Dry Bar

NewSpring (the “Firm”), a family of private equity strategies, today announced that NewSpring Franchise, the Firm’s newest strategy focused on investing in innovative franchise and multi-unit concepts, has invested in Blo Blow Dry Bar ("Blo"), North America’s original blow dry bar and the world’s largest blow dry bar franchise.

This investment is the first made by NewSpring Franchise, the Firm’s newly launched investment strategy

“The investment in Blo Blow Dry Bar is a landmark for NewSpring as it represents the first deal in our newly formed franchise portfolio,” said Patrick Sugrue, NewSpring General Partner. “Our extensive diligence on the brand revealed the strength of a unique concept in a high-growth sector with increasing demand, healthy income potential for its franchise partners, and a strong management team. We are thrilled to launch the Franchise strategy with such an exciting investment and look forward to leveraging the Firm’s wealth of knowledge, experience, and resources to support many more multi-unit businesses.”

Blo is the world’s largest blow dry bar franchise with a quickly expanding geographic footprint

Blo represents exactly the type of multi-unit business NewSpring Franchise targets for investment. As a leading personal care franchise brand specializing in blow outs, as well as other signature hair and makeup services, Blo currently operates over 100 units with more in development across the United States and Canada. The Company’s proven ability to expand in 26 states and internationally validates the business model’s portability and scalability.

Led by an experienced management team, Blo has significant opportunity for continued franchise unit development

CEO Vanessa Yakobson is a proven leader with a long track record of brand marketing and business development success in the hair care space. Blo has significant opportunity for continued franchise unit development in existing and new markets considering the growing demand for blow dry bar services and the favorable unit-level economics for Blo franchisees.

“The investment from NewSpring is a testament to Blo’s distinct brand reputation, our proven success, and the strong growth potential in the blow dry bar category. Blo has experienced significant growth since its inception in 2007. With this partnership, we are positioned for major expansion in both existing and new markets, while we make strategic investments to bolster our brand and systems, and support programs.”
— Vanessa Yakobson, CEO of Blo Blow Dry Bar

There is a disproportionate amount of multi-unit brand growth opportunity in the lower-middle market

NewSpring Franchise seeks to further invest in capital-efficient, consumer-facing, multi-unit businesses with proven unit-level economics, real cash flows, and strong management teams. With a disproportionate amount of growth opportunity in the multi-unit brand industry at the lower end of the market and favorably shifting market dynamics, NewSpring’s active investment and operating value-add approach is well-positioned to help franchises accelerate growth.

“The U.S. middle class leans heavily on franchise businesses throughout their daily lives, and with household disposable incomes increasing, we see this trend accelerating as multi-unit companies further embed themselves in the lives of this demographic. These consumer trends are driving significant opportunity for rapid expansion and revenue growth for multi-unit companies in the lower-middle-market. Blo is primed to capitalize on these favorable market dynamics and we couldn’t be more excited for this partnership.”
— Satya Ponnuru, NewSpring General Partner

The launch of NewSpring Franchise is a natural extension of the Firm’s mission to support a range of capital needs in the lower-middle market

Having successfully partnered with over 170 businesses in this market segment for over 20 years, this horizontal growth and expanded sector focus allows NewSpring’s team of operational and investment experts to effectively serve a wider range of growing middle-market companies.

NewSpring Franchise is led by Satya Ponnuru and Patrick Sugrue. Patrick brings over 25 years of C-level operating and consulting experience at several national franchise brands. Over the last 15 years, Satya has focused on sourcing, investment execution, and oversight of lower-middle-market multi-unit businesses. These two will leverage their complementary skill sets coupled with the combined capabilities of NewSpring’s firmwide resources to find attractive opportunities for investment while working closely with existing portfolio companies to help them grow.

As part of the transaction, NewSpring General Partners Satya Ponnuru and Patrick Sugrue will join the Blo Blow Dry Bar Board of Directors.

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